Political demonstrations that have closed Bangkok’s airport for almost a week and traumatized Thailand’s tourism industry promise to derail retail profits and curtail the country’s economic growth.
Retail sales grew 5 percent in the first six months of 2008, but could come to an abrupt halt amid the country’s political unrest, Ian Gisbourne, head of research at Phatra Securities, said in a phone interview from Bangkok.
“The impact of all of this is significant,” said Gisbourne.
Thailand’s 2009 economic growth, forecast a month ago by Phatra Securities at 3.3 percent, now may not exceed 2 percent, Gisbourne said. The Bank of Thailand said tourist arrivals next year could fall to 3.4 million, a 40 percent decrease, if the shutdown of Suvarnabhumi airport and the political crisis drags on. Tourism constitutes 6 percent of Thailand’s gross domestic product, and Bangkok’s upscale shopping malls are dependent on tourists for at least a third of their business. The government has predicted that one million jobs could be lost because of the drop in tourism.
“Everyone is complaining, hotels and retailers,” said Santi Chudintra, director of the American marketing division of the Tourism Authority of Thailand.
Some 426,778 Americans visited Thailand during the first six months of this year, a 9 percent increase over 2007. Bangkok’s Suvarnabhumi airport is the 18th busiest in the world, and last year handled more than 40 million passengers.
The Bank of Thailand reported last week the nation’s exports grew 4.7 percent year-over-year, the slowest rate in six years. It also said private investments, consumption and manufacturing are showing signs of slowing. Manufacturing, the bank reported, rose 2 percent year-over-year, down from 4.3 percent in September. Business confidence is at its lowest level since 2000 and reflects concern over Thailand’s political uncertainty, the bank reported.
While demonstrations against the government by the People’s Alliance for Democracy have been mounted for the past month, they dramatically escalated as thousands of demonstrators took over Bangkok’s international airport last Tuesday. They forced the closure of the city’s domestic airport, Don Muang, on Thursday. An estimated 300,000 international tourists were stuck in Bangkok. The Thai government is offering stranded tourists $50 a day toward hotel costs. On Monday, protesters trying to force the prime minister’s resignation brought in thousands of reinforcements to occupy Bangkok’s two besieged airports.
The American Embassy in Bangkok has daily posted announcements that are increasingly tough in wording. On Saturday, the embassy posted a statement by Gordon K. Duguid, acting deputy spokesman, who urged the demonstrators to “walk away from the airports peacefully.”
The Board of Trade of Thailand told the Bangkok Post that the closure of the airport is costing importers and exporters almost $1 billion a day in damaged and lost cargo consisting primarily of food, agricultural products and electronics.
Rumors have swirled around Bangkok, and last week retailers feared the demonstrators were planning to target the upscale mall Siam Paragon, said a spokesman for the 5.4 million-square-foot center.
“They said they planned on attacking something very important to Thailand,” said Udom Suphpathom, public relations division manager of Siam Paragon.
The mall, a centerpiece of Bangkok’s retail district, is popular among Thais and tourists not only for its shopping, but for its entertainment, which includes movie theaters, restaurants, an aquarium, a health club and game rooms. More than 500 retailers, bankers and investors gathered Wednesday in a massive conference hall at Siam Paragon to discuss how the world’s damaged economy could affect the Thai one.
At Siam Paragon, sales are better than other malls, where business has been described as “so-so,” Suphpathom said. Already, plans are being laid to raise the 2009 advertising budget by 20 percent, he said.
For this holiday season, Siam Paragon plans a midnight sale and discounts to celebrate the mall’s third anniversary. Central Pattana Ltd. went ahead with plans for a Thursday grand opening of a new mall in a Bangkok suburb, despite the nearby demonstrations at Don Muang Airport.
Central Plaza Chaengwattana, a 3.2 million-square-foot, $1.4 billion mall, is one of four new retail centers Central Pattana plans to open in the next year. The retail developer has some $4 billion in retailing centers under way in Bangkok’s distant suburbs that represent 2.6 billion square feet of retail space.
Despite plummeting consumer confidence and the economic depression settling over Thailand, Gisbourne said the malls would appeal to the country’s emerging middle class outside Bangkok.
Gisbourne predicted private investment in Thailand would plummet in the fourth quarter — in part because foreign real estate investors, who typically like to inspect properties they are buying, won’t be coming. November, December and January are the peak of Thailand’s tourism season, he said.
The People’s Alliance for Democracy has been trying to topple Prime Minister Somchai Wongsawat, who they charge is a puppet of a billionaire predecessor, Thaksin Shinawatra, who was convicted of corruption and other charges and is now living in exile in the U.K. The alliance took over the prime minister’s office in August and twice blockaded Parliament, spurring street battles with police that left two dead and hundreds injured.
My character, Dinah Madani, is just the coolest, [most] badass woman imaginable," says @amberroserevah. The actress stars in @marvel's newest series on @netflix, @thepunisher. To prepare for her role, Revah sat down with Homeland agents to get a real sense of with Dinah's day-to-day life is really like. Read our full interview on WWD.com. #wwdeye (📷: @jilliansollazzo)
A scene from the 91st annual @macys Thanksgiving Day Parade. The parade, which boasts 50 million TV viewers and 3.5 million on-site spectators, is considered one of the largest and most watched parades in the world. (📷: Jason Szenes/EPA-REX)
The circus came to @bloomingdales 59th Street on Tuesday night and lit up Lexington Avenue with acrobatic dancers, death-defying knife throwing, sword swallowing and aerial acts with no net. The 45 minutes of theatrics built up to unveiling the holiday windows depicting @swarovski crystal-encrusted circus pieces and scenes from “The Greatest Showman” – songs from the soundtrack included. See the rest of the photos on WWD.com #wwdfashion (📷: Joshua Scott)
The psychedelic fashion that pervaded the ’60s is back with an exhibit at the @museumofcityny. “Mode New York: Fashion Takes a Trip” chronicles the changing styles from 1960 through 1973 and features designers such as @ysl, @oscardelarenta and more. The exhibition, which is on display through April 1, is organized into four periods: First Lady Fasion, Youthquake, New Bohemia and New Nonchalance. Pictured here is model Pat Bardonella during the Garvey Day Parade in 1968. (📷: @kwamebphoto) #wwdeye #wwdfashion
“People should be a lot more honest in expressing both the dark and light of themselves. We need to give each other the space to do that because it’s the only way we can grow and evolve,” says @noelwells of her new film “Mr. Roosevelt,” which is largely based on her own struggles. Unexpectedly leaving @nbcsnl in 2014 after just one season, Wells felt set back in her self-esteem and career trajectory. She quickly refocused her energy to more personal projects, which led to the completion of “Mr. Roosevelt.” Read the rest of WWD’s interview with the “Master of None” actress on WWD.com #wwdeye (📷: @jilliansollazzo)
@barbrastreisand is giving fans a chance to see her perform up close in a new concert series, which makes its debut on @Netflix today. From behind-the-scenes takes to her concert performance in Miami last December, the two-hour streaming special captures Streisand in her element. Pictured here is the singer/actress photographed for WWD in 1963. (📷: Palmieri Tony) #wwdeye #wwdarchive
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)